US Fed Interest Rate Cut Expectations Rise, LME Zinc Focus Shifts Upward [SMM Zinc Morning Comment Oct 11]

SMM, Oct 11: Overnight, US CPI fell for the sixth consecutive time but exceeded expectations across the board; Wall Street Journal: Bostic is open to not cutting rates in November; Israel's security cabinet will meet to decide how to respond to Iran's attack; if Israel attacks Iran's nuclear facilities, Iran may change its nuclear principles; Li Qiang met with Japanese Prime Minister Shigeru Ishiba; mortgage rates on existing home loans were uniformly reduced to LPR minus 30 basis points; the Shanghai Stock Exchange held another brokerage symposium to promote the implementation of M&A policies; Hangzhou will issue 430 million yuan in consumption vouchers.

Overnight, LME zinc opened at $3,023/mt, initially fluctuating widely along the daily moving average, dipping to $3,003/mt during European trading hours. Subsequently, shorts reduced positions, and LME zinc fluctuated upward, peaking at $3,101/mt by the end of the session, closing up at $3,099/mt, an increase of $66.5/mt, or 2.19%. Trading volume decreased to 10,979 lots, and open interest fell by 364 lots to 260,000 lots. Overnight, LME zinc recorded a bullish candlestick, with LME inventory down by 1,575 mt to 242,450 mt, a decrease of 0.65%. Macro sentiment was positive, with US CPI falling for the sixth time but exceeding expectations, and US Fed interest rate cut expectations rising, shifting LME zinc's focus upward. It is expected to fluctuate at high levels today.

Overnight, the most-traded SHFE zinc 2411 contract opened at 25,005 yuan/mt. Initially, bulls increased positions, and SHFE zinc fluctuated upward, peaking at 25,430 yuan/mt by the end of the session, closing up at 25,330 yuan/mt, an increase of 530 yuan/mt, or 2.14%. Trading volume decreased to 97,234 lots, and open interest increased by 4,725 lots to 118,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, retracing to the 5-day moving average. Macro sentiment rose again, with US CPI data exceeding expectations, US Fed interest rate cut expectations rising, and domestic mortgage rates on existing home loans uniformly reduced to LPR minus 30 basis points, shifting SHFE zinc's focus upward. It is expected to fluctuate at high levels today.